The purpose of this research was to analyze US apparel trade
building up to and following the MFA IV renewal in 1986, so as to gain
insight into the reasons for US apparel industry support of the new fiber
inclusions, and to gauge effects of MFA IV on US apparel imports overall
and specifically from the PRC. The study focused on the period 1978 -
1988.

Total imports from all suppliers (World) were examined by country of
origin: China (PRC), and rest of world (ROW); fiber content: MFA IV-fiber
or all fibers and whether knitted or woven construction. The imports were
then examined to determine the impact of economic variables such as the
exchange rate, and US personal apparel consumption expenditure (PCE).
Imports were found to have increased from 1978 to 1987 and then to
have declined in all categories except one from 1987 to 1988. The MFA IV,
implemented in August 1986 was believed to have caused a reduction of
import volumes after an initial lag period (expected in international
trade). However, other factors were implicated in the trade reduction
primarily the fall of the dollar. The dollar was strong through the early
1980s until its peak in 1985, it then declined for the rest of the study.

The one category which continued to increase after the trade
restriction was items of MFA IV woven apparel. The reason for this
continued increase is not clear but it is believed to be the absence of
specific restriction, i.e., pure silk had not been included in bilateral
agreements so it is possible that suppliers were switching the product mix
to increasing quantities of the less restricted group. Also this would
have been the case if the items were coming from new and/or unrestricted
suppliers.

In conclusion, it is felt that the apparel import rate or increase
was the primary concern and the factor that determined action not the
actual volume of imports as the MFA IV-fibers were increasingly used in
apparel production.